Does your FHO group’s governance agreement support the present and future of your FHO?
Since the new PSA agreement was implemented, many family physicians have successfully transitioned or formed a FHO group. However, due to the daily pressure of managing a practice, many have not been able to review and revise the contents of their group governance agreement. Understanding the contents of your agreement is important to ensure individual and group needs are met and that your practice runs smoothly and efficiently. In this blog, we will share key areas to consider when reviewing your FHO governance agreement and how we can help.
What is a FHO Group Governance Agreement?
A FHO group governance agreement is an agreement between all physicians on the rules and regulations of being part of the group. The agreement is set up when a FHO is formed and documents who oversees what, how decisions are made, how authority is exercised, and how decision-makers are held accountable. These structures are established to maximize the advantages of a group practice while mitigating some of the challenges groups may encounter.
Many doctors use the OMA Governance Agreement template as a starting point and amend it based on the needs of the FHO group. The governance agreement is a living document and can be amended by the group in the future. The agreement must be signed after it has been reviewed for it to come in affect.
Group Decision Making
For each category in the governance agreement, the FHO group can indicate the number of members required to come to an agreement when changes take place. There are four voting types physicians can employ:
- Majority: more than 50 percent of the group must come to an agreement.
- Special Majority: two-thirds of the group must come to an agreement.
- Extraordinary Majority: three-quarters of the group must come to an agreement.
- Unanimous: all members of the group must come to an agreement.
The voting type depends entirely on the needs of the group. For example, groups may want to have a unanimous vote for deciding whether a new member comes on, while having a majority vote for deciding vacation time.
We recommend implementing a backup plan for when there is no consensus for the first vote. Some considerations would be to do a revote, have the lead group physician make the final decision, or decreasing the percentage of consensus the next time you vote.
Modifications to the FHO Governance Agreement
While the fundamental content is the same in each FHO group agreement, there are certain categories that are customizable. The key areas we suggest customizing to your FHO group needs are:
- Admission of New Physicians
- Time Away from Practice
- Negative Access Bonus Payback
As mentioned previously, all these categories can be set to a specific voting strategy: Majority, Special Majority, Extraordinary Majority, or Unanimous.
Admission of New Physicians
Since the change in FHO group requirements in the new PSA, there have been an increasing number of physicians being added into existing FHO groups to meet the six-physician minimum. The Admission of New Physicians’ section in the group governance agreement helps guide FHO groups through the decision-making process of adding a new member as well as provide the new physician visibility into their involvement in the group once they join. It is important for the Admission of New Physician section to align with the group’s needs and ensuring everyone is in agreement with the addition of a new member.
- Outside Use Performance: Does the new physician’s outside use align with your group’s performance?
- After-Hours Requirements: Does adding a new member increase the after-hours requirements and is everyone on board with these new requirements? Does the new physician agree with the after-hours shifts that they have to take on?
- Existing Governance: Has the new physician reviewed and discussed the agreement with the FHO lead?
- Work-Based Model: Is the new physician willing to work in this team-based model?
- Mode of Practice: Is the physician clear regarding their mode of practice? (ex. full time, part-time, flexible)
The Withdrawal/Resignation section in the governance agreement provides the process for a physician to retire or transition their practice to someone else. It is important to have clauses in place to ensure it is set up for the potential needs of the group.
- Timing: How much time does the group require to effectively manage the transition?
- Rostered Patients: How will the group manage the departing physician’s rostered patients? Will the departing physician need to find a replacement physician, or will the group absorb the patients?
- Impact: What is the impact on the group when a retiring physician is reducing their practice? (It may affect access bonus)
It is recommended that you include a clause in your agreement to ensure that all MOHLTC paperwork is signed to enable physician departure.
Time Away from Practice
The Time Away from Practice section provides information on how vacations and time off is defined. We’ve seen many groups have up to 10 weeks of vacation, but the number of weeks depends on what works best for the group.
- Defining Vacation: Is time for Continuing Medical Education (CME) included in vacation?
- Leave of Absence: What are the details defining a Leave of Absence?
- Groups Coverage Preferences: Will you be using locums or FHO colleagues as a replacement? How many colleagues can be off in any given period?
- Other Leaves: What provisions will be made for illness, bereavement, and parental leave?
Negative Access Bonus Payback
The Negative Access Bonus Payback section provides information on how the group decides what the payback will be when their access bonus is negative.
- Access Bonus Payback Policy: Do they have to pay 100% of the amount they are negative, or will it be a partial payback (e.g. 50%), or no payback?
- Grace Period for New FHO Physician: What is the grace period for new graduates vs. established physicians?
DoctorCare’s Role in the FHO Group Governance Agreement
At DoctorCare, we’ve worked with over 100 FHO groups over the years to help them implement their governance agreements and we have seen the common pitfalls and challenges they face.
We can assist FHO Groups with their agreements by:
- Helping physicians understand their reports and ensure they are receiving the full financial benefits of the FHO;
- Creating customized governance agreements addressing the unique circumstances of the FHO group and practice;
- Ensuring physicians have full enrolment and effectively manage rosters by identifying high outside use;
- Keeping up to date on changes that impact FHO groups.
Through our experience working with groups on their governance agreements, we help avoid conflict and guide groups in the right direction.
Implementing a group governance structure helps foster partnerships between leadership and the physicians in the group and, in turn, improves overall practice performance. Establishing a group governance model can be very rewarding but requires thoughtful planning and consideration. If your FHO needs help forming a group governance agreement or you are seeking to amend your existing agreement, contact us today and we will be happy to assist you.